Helping innovation’s spread is as important as helping its birth

Policy has focused on creating innovation, while neglecting its diffusion. Horizon Europe should try to change that, say Bastian Krieger and his colleagues.

On R&D investment, Europe is losing ground to its Asian competitors and barely keeping pace with the United States. This deficit becomes greater still when looking at R&D-based innovations. In recent decades, most of the world’s market-creating, disruptive innovations have been developed outside the EU. Compared with the US, the EU particularly lacks small firms delivering disruptive innovation—the kind that opens new markets.

As a result, the relationship between R&D investment and productivity growth in Europe has weakened. The rate of return on innovation also seems to have fallen, and technologies used by the most productive firms take too long to reach the rest of the market.